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Technology Changing the Face of Investor Relations

Wealth management firms that are looking to grow their client base and bring in higher levels of revenue may want to begin offering high-tech services to cater to the younger segment of potential investors. According to a recent survey conducted by Cisco, there is a $31 billion revenue opportunity with wealthy investors aged 55 or younger.

"The rapid adoption of technology is quickly changing the game for interactions between wealthy investors and their financial advisers," said Jörgen Ericsson, vice president and global lead for financial services practice for the Cisco Internet Business Solutions Group.

Technology is changing wealth management
In the past, investors would have to get in touch with their financial analysts to learn about their funds and whether the market is treating them now. Nowadays, 36 percent of investors under 55 use a PC to check or manage investments daily, 28 percent use smartphones to peek into their portfolios monthly and 24 percent trust tablets for this action.

Understanding how much younger investors are checking on their investments, it makes sense for wealth management firms to begin to craft their offerings with this youthful segment in mind. For example, 61 percent of under-55 investors want the ability to meet with their financial advisers via teleconferencing. This demand stems from the fact that roughly one-fifth of wealthy investors live 50 miles or more from their advisers. 

"With the right technology-enabled approach, financial advisers can create a significantly improved customer experience resulting in more frequent and higher quality interactions that will boost customer loyalty and that will even attract wealthy investors who currently do not have an adviser," said Ericsson.

Social media playing a larger role than ever
It's not just college students, recent graduates and young professionals using social media; in fact, an article written by Jeannie Gu, an adviser for KPMG in the UK, referenced a survey from the Pew Internet & American Life Project, which showcased the fact that 52 percent of Twitter and Facebook users are 35 or older, and wealth management groups are taking notice.

In her piece, Gu discussed how Morgan Stanley, Deutsche Bank, Credit Agricole and BNP Paribas are all active on social media, most notably Facebook, Twitter and YouTube. These networks allow them to form closer relationships with all of their following. However, GU does have some advice for these institutions using social media sites.

"To build a strong personal relationship with their clients, the industry should explore the more interactive aspects of social media and aim to build a community," wrote Gu.

With the imprint social media has already made on the wealth management world, it would be wise for all firms hoping to benefit from investors, both young and old, to learn how to communicate with their potential clients on a number of different channels, and to step up their use of technological innovations.

Is your firm ready to invest in technology? Do you think that social media use will grow to become even more important in the wealth management sector?